AZTEC — The city's 1998 annexation of 320 acres east of downtown never officially happened.

City staff discovered that fact during recent discussions with the New Mexico State Land Office about acquiring a special-use permit allowing an environmental study on 20 acres of property within the annexed area. That property near the Aztec Speedway on the south end of the city was used for a city landfill. The landfill was capped in the late 1980s after three decades of use.

The landfill parcel and another parcel of about 30 acres that also lies within the annexed area are state trust land. State trust land was set aside when New Mexico was granted statehood in 1912. The Land Office leases the land for various uses and the revenue primarily benefits public schools, universities and hospitals.

The two parcels were included as part of the city's 1998 expansion eastward under then-mayor Mike Arnold.

Annexing trust land requires state approval, which was never finalized. State and local officials say it's not clear which party was responsible.

"It never happened, so here we are all these years later officially finalizing the agreement," said Roshana Moojen, Aztec's outgoing community development director.

On Tuesday, city commissioners approved a new annexation agreement with the Land Office that corrects and finalizes the annexation of the land.

With a finalized annexation agreement, the city can now negotiate with the Land Office to develop a planning and zoning agreement. The agreement would allow the city to regulate uses of the trust land within city limits and afford it joint review authority with the Land Office regarding future commercial leases.

Before the area is developed, the city plans to complete an environmental analysis of the landfill parcel.

"The city's interest is in finalizing the environmental study on the historic landfill to ensure there's no risk to human health," Moojen said.

In 2000, a surface-based, or "Phase One," environmental study was completed at the site. The finalized annexation agreement paves the way for a second, or "Phase Two," environmental study at the landfill, including soil and groundwater sampling and testing.

New Mexico Commissioner of Public Lands Ray Powell said the problem with the annexation was a technicality. And, he added, he is pushing for greater awareness of public trust land throughout the state.

"Apparently, the communication between Aztec and the Land Office (in 1998) was not as effective as it should be and therefore (the annexation) wasn't valid," Powell said. "But we're now working very well with the city to ensure trust land is tended to well."

In 1912, New Mexico started with 13 million acres of surface land and mineral estate acreage, roughly 11 percent of the state, Powell said. Today, the state has 9 million acres of working trust land.

"Commissioners sell, lease or trade the land without anybody else's approval," Powell said. "If there's a lot of sunshine and attention (paid to the State Land Office), good things can happen. The healthier and more prosperous local communities are, the more valuable the state land is. This is part and parcel with what we're invested in doing."

Over the last three years, the state's working lands have generated $2 billion, and 94 percent of that has gone directly to public schools, Powell said.

Although the landfill has been closed for more than two decades, Aztec had been paying an annual lease on land. Two years ago city officials terminated the lease.